9th February 2024

JPMorgan fined nearly $40bn for two-decade legal oversights

Over the years, US banking giant JPMorgan Chase has been at the centre of major regulatory breaches affecting key elements of its operations, in return threatening the institution's reputation and financial position. In this context, the situation has led to the bank incurring substantial fines from various regulators. According to data compiled by Finbold, from 2000 to 2024, JPMorgan incurred fines totaling $39.34bn for various violations. The largest fine, amounting to $13.46bn, was related to toxic securities abuses. Failure to comply with investor protection policies resulted in a fine of $6.25bn, followed by $5.36bn for mortgage abuses. Additionally, banking violations led to fines totaling $4.26bn during the same period. Consume protection violations ranked fifth at $3.19bn, while other breaches resulted in losses of $ 6.81bn.

A breakdown of offense categories reveals that financial violations accounted for the highest amount, totaling $26.66bn across 117 records, followed by consumer protection at $8.62bn from 63 records. As documented in 28 records, competition-related violations amount to $2.48bn, while government-contracting violations stand at $0.61bn from a single record. Employment-related offenses rank fifth, totaling $0.52bn from 50 records.

The research explored possible intrugues behind JPMorgan's heft fines incurred over the past two decades. According to the research report:

"The cost of fines incurred by JPMorgan Chase is hefty, and it compliments the fact that such institutions operate in a complex environment, and occasional legal issues may arise due to the intricate nature of financial markets, transactions, and regulatory compliance. When violations occur, they are typically addressed through legal proceedings, settlements, or regulatory actions. The lack of adequate internal controls, combined with a failure to address misconduct promptly, has potentially allowed unethical practices to play out over the years, resulting in hefty fines."

In the meantime, there is a likelihood of an increase increase in the number of fines in the future, given that regulators are implementing measures to curb violations, including introducing approaches such as whistleblower programmes.

JP Morgan Trends(56 articles)
Finbold Trends(5 artcles)